Numbers released by the Bureau of Labor Statistics last week indicated that the number of unemployed person and the national unemployment rate remained relatively unchanged during the preceding month. Over the year, both measures have steadily declined. The national unemployment rate overall has declined from 5% to 4.5% over the year.
Other economic reports recently released by the Labor Department indicated that there was actually strength in job growth during the month of November, 2006 with 132,000 jobs added during the month. This was up from a gain of 79,000 jobs during the previous month and even more than economists had predicted.
The addition of these jobs; however, apparently did not positively impact the manufacturing sector, especially not in the automotive industry.
Following practically right on the heels of this announcement came the news yesterday that DaimlerChrysler AG may be planning a layoff that could affect 16% of its North American operations. According to company officials the planned layoff is a result of a decrease in demand. The layoff will primarily affect truck operations across North America. Throughout the last few months inventories have swelled while sales have dropped by almost 8%.
The layoff announcement has the potential to cut 4,000 jobs in truck operations which would include 800 layoffs that have previously been announced and are scheduled to begin taking place in March, 2007. Those layoffs will occur at the Freightliner’s St. Thomas, Ontario plant and will impact approximately 36% of the plant’s total workforce.
DaimlerChrysler, which is the largest commercial truck manufacturer in the world, employs more than 25,000 people through the United States, Mexico and Canada. The company has indicated that workers who are laid off may be eligible for recall in the event production volumes return.
News of the DaimlerChrysler layoff was preceded by an announcement from AM General, contracted by General Motors to manufacture the Hummer H2, at the end of November that 160 employees would be laid off from the Mishawaka, Indiana plant. According to a GM spokeswoman the move resulted from a leveling off of the vehicle’s once massive popularity. Reports indicate that sales had dropped by about half since they peaked in 2003. High gas prices and the rather expensive ticket price of the H2 as well as the introduction of a less expensive version, the H1, could be contributing factors to the decrease in sales. Another GM spokesman indicated the layoffs will begin taking effect January 2, 2007.